SBI Gains $100 Million Through Green Bonds Amid COVID-19 Dread

The transaction underlines that investors still bet on sovereign-backed issuances from developing markets like India

March 30, 2020. By News Bureau

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The State Bank of India has announced that it has achieved $100 million via dedicated bonds in spite of challenges in global financial markets, scorched by COVID19 outbreak.

The transaction underlines that investors still bet on sovereign-backed issuances from developing markets like India.

“It is an extremely important transaction for India especially in this critical situation,” said Rajnish Kumar, Chairman, SBI. We believe this issuance will reassure confidence in India’s strength in the international bond market. We at SBI have adopted the green bond framework with an objective to create a positive impact on the environment.

Japan-headquartered MUFG Securities has exclusively helped the lender for this issuance.

Those bonds have been priced after adding 80 basis points over three-month London-Interbank Offered Rate, which is now at about 1.450 percent, two people familiar with the matter told ET. This will be floating rate bonds.

The profits will be used to fund non-convention energy sector. This is the third set of green bonds the government-backed bank offered, said one of the persons cited above.

The bonds will be issued through SBI’s London branch on the last day of the financial year and will be listed on the Singapore’s stock exchange – SGX.

SBI has already two Climate Bond Initiative Certified Green Bonds issuances aggregating $700 Million.

Rating company Fitch graded the issuance with BBB- on par with New Delhi’s sovereign issuance. The bond sale is supposed to be the first green issuance by a public sector bank in this financial year.

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